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Tuesday, July 9, 2013

Supply Chain Risk Management Paper

An interesting question was sent to me only the other day on Supply Chain Risk Management. "Martin, do you have any specific risk frameworks or do you know of any good case studies that have been published on Supply Chain Risk Management (SCRM)?".As it happens, we are working on SCRM in Causal Capital but more on that another time. I also do know of a really grand case study on the framework aspects of Supply Chain Risk Management that has been published by The Pharmaceutical Quality Group, let's take a quick peep.

A typical SCRM framework

There are some difficult agendas in risk management today, front-to-back stress testing is one of them but Supply Chain Risk Management would definitely be another. Developing risk frameworks for either of these initiatives will often end up being quite a lot of complex work and will require risk analysts to have a broad knowledge of various risk standards.

SCRM Considerations | Causal Capital [Click to enlarge image]

In our schematic above we have listed various ISO Standards that encompass the efforts required for Supply Chain Risk Management and a risk analyst is going to need to have a solid understanding of Quality Control, Business Continuity Management as well as background support in finance. Supply Chain Risk Management isn't just about controlling operational risk and being able to measure market and credit risk are key to wining in this field of risk management. As it is, taking control of all of this little lot is no small feat, that is for sure.

SCRM - Pharmaceutical Quality Group

If we take a look at the SCRM Pharmaceutical case study [ LINK ] we too can see that they have overlapped several ISO standards to meet their objectives but focus much of their framework efforts on quality control. This paper is an absolutely must read for risk analysts working in Supply Chain Risk management and I recommend downloading the PDF from the link above.The paper covers so much in detail from procurement control through to risk assessment, it also describes the inputs required to carryout assessments in these areas of risk management. The paper has a whole section labeled the Risk Management Toolbox which is kind of similar to ISO 31010 in some respects and makes for very interesting reading.SCRM Pharmaceutical Case Study whitepaper can be downloaded from thisLINK.

Author

Martin Davies is a risk framework architect with strong domain knowledge across a diverse set of risk fraternities, a background in banking front-to-back and the ability to articulate business requirements into functional information technology concepts. He is focused on structured products for emerging markets and works with several tier one banks, regulators and brokerages across South East Asia.